All Forum Posts by: Leslie Bandy

@Jeff B. : I agree with you that any buyer should do full inspections.  Having a more aggressive timeline doesn't negate the buyer's ability to do that, it just speeds up the process. 

Generally it's just way too expensive.  You're better off buying in a zone not prone to liquefaction and doing what you can to retrofit your house to be able to sustain a large earthquake.

It sounds like it's different for different parts of the Bay Area.  In the Tri-Valley area, it is much more common to see 30/14/14.  In Oakland, it's often at most 25/10/10 to just get your contract looked at. 

@ Laura M.:

I think the biggest threat to housing prices we have in the Bay Area right now is a tech slowdown.  There are signs that this is starting.  VC is being much more selective in funding and ratings agency are starting to cut ratings on under-performing tech stocks.  Those are very good things at cutting back at some of the frothiness that's been developing.

For the most part, I've been seeing lots of people driven to buying because of the extremely high rent prices.  They have middle class jobs, are well-qualified for prime mortgages, are often paying with much more than 20% down, and plan to live in the houses for the long-term.  I don't think we have the subprime loans, liar loans, and no-down loans that lead to the 2008 crash (though I've started to see the reappearance of no-down loans in SF - yikes).  Even through the aftermath of that crash, SF got off comparatively easily - in the 5-25% range .  

See: http://www.paragon-re.com/3_Recessions_2_Bubbles_a...

The fourth quarter Fitch Ratings' Sustainable Home Price Report says that Bay Area homes are now, on average, 16% over-valued.  The sustainable valuation is based on coupling incomes to housing prices.  Very strong income growth since the last housing peak (44%) and since the post-recession low (18%) have meant that housing prices have been coupled with income until quite recently.  

http://media.bizj.us/view/img/8513612/us-rmbs-sust...

A cooling off of the market by 10-20% would just cut into the overbids for most listings at this point.  That seems healthy enough.  There will likely be larger price drops for properties in areas that are more iffy or prone to speculation.  Who knows, maybe I'm way off base here....  If only I had a crystal ball...  

In any case, if you're still reading, Laura, I know way too many good people looking for rentals in good neighborhoods.  It's a tough market for the renters out there.

I'd talk to a CFP.  There are so many variables in your particular short and long term goals combined with your current and future earnings picture, that it is difficult to give across the board advice.  

I'm personally a huge fan of passive income, so I love buy and hold strategies. The Bay Area has its own pluses and minuses, however. Rent control and just cause evictions can make getting bad tenants out difficult (though it is much easier for SFR's and quality areas tend to make it easy to get quality tenants). That said, Prop 13 gives property owners their own form of rent control which will forever keep your taxes lower than buying at current market values. Besides your basic rental income vs. expenses spread, there are significant tax deductions available to rental property owners such as those listed here: https://www.biggerpockets.com/renewsblog/2015/05/20/tax-benefits-real-estate-investing-rental-properties/

I'm a real estate agent and home owner in Oakland.  We are certainly at a market peak and there's lots of talk that we'll see some cooling off by the end of the year.  That said, it doesn't seem like it will be a bubble bursting.  Housing has always been expensive and in high demand in the Bay Area, and seems like it will remain a good long-term investment.

For calculating returns under various scenarios you can use this: https://www.calcxml.com/do/inv04

If you have any questions about how much your house would sell for in this market, I'd be happy to provide you with some comps.

Best,

Leslie Bandy

BRE 01990425

Oakland and Berkeley both have just cause eviction laws, and tenancies do survive change of ownership for most multi-unit properties, so do look into those before purchasing a tenanted property:  https://www.tobenerlaw.com/oakland-rent-control/

Welcome!  I'm always interested in wholesale deals, so get in touch if you have one!

Hi Tea,

If you're open to areas a bit outside of where everyone seems to be looking, Eastmont Hills is a nice neighborhood and has a few 2 units around $500K.  I know that inventory is ridiculously tight right now which is fueling the overbidding.  Hopefully inventory will open up a bit in the spring and summer.  

There seems to be growing belief that there will be a deflation of prices this year due to big losses in VC funding for tech companies, but I'm curious as to how large a part of our economy that is.  I think, if anything, that will bring selling prices closer in line with listing prices, but not bring listing prices down.  But, that's my guess and unfortunately I don't have a crystal ball.  I have a number of first time home buyer clients that have the same question as you.

Good luck to you!  I know it's a tough market.  Feel free to get in touch if you ever have any questions.

Leslie

Hi everyone,

I'm an Oakland resident, real estate investor and agent. I'm curious if any of you have made any moves in the Oakland market recently.  Prices have been skyrocketing and inventory is low, though I'm still seeing some reasonable deals for multi-families.

Best,

Leslie Bandy

Hi Kali,

I'm an Oakland resident, real estate investor and agent. The market here definitely has a high cost of entry, but occupancy levels and rents also tend to be on the very high side.  There are certainly some deals to be found.  I've also had great experience investing in out-of-state turn key.  I'd be happy to answer any questions you may have.

Best,

Leslie Bandy